Savings Rate Rundown
More market leading deals continue
to push rates up!
Savers continue to see positive changes as we move into the autumn, with improved deals still being launched by selected providers.
The Savings Champion Index, which looks at the average of the top five easy access accounts has been on the rise in recent months and has now hit a two year high, the highest level seen since August 2013. Recent weeks have seen new improved rates from Kent Reliance (1.65%) and ICICI Bank (1.64%), although demand for the account from Kent Reliance may have been high, as it has now been withdrawn from sale.
Fixed rates have also continued to improve, with new best buys launched in the last few weeks by RCI Bank, National Counties Building Society, Secure Trust Bank, Vanquis Bank, Paragon Bank and Charter Savings Bank. Of particular note is a market leading 3 year fixed rate bond from RCI Bank, further evidence of the French bank's aggressive and eye-catching pricing since its launch in June this year.
When we examine the fixed rate averages today, compared with 6 months ago, each category is significantly higher, giving further evidence of the general trend in the market at the moment for improved fixed rates.
Interestingly, National Counties Building Society last week launched a new Tracker Savings Bond, which at 2.00% (1.50% above the Base Rate), is the highest paying account of its type on the market at the moment. This move may be indicative of an increase in interest from savers for this type of account, as speculation about when the Base Rate will rise continues.
Despite all of this positive news, existing account holders continue to see their interest rates slashed by providers, with large numbers of accounts cut in both July and August. Despite only being a few weeks old, September has already seen 73 accounts cut, so it would be no surprise to see another significant number before the end of the month.
RCI Bank has launched a new 3 Year Fixed Term Savings Account paying 2.70% gross/AER. Accounts can be opened online with a minimum of £1,000 and funds cannot be accessed within the term.
The new bond is paying a significantly higher rate than its nearest competitor (Charter Savings Bank 2.55%), which is encouraging news, although savers would need to carefully consider the fact that deposits would not be protected by the UK FSCS, but by the French equivalent.
ICICI Bank has increased the interest rate on its HiSave SuperSaver Issue 1 from 1.54% gross/1.55% AER to 1.64% gross/1.65% AER. The increase affects both new and existing account holders. Accounts can be opened online with a minimum of £1 and interest is paid on a monthly basis.
Already a best buy, this increased rate puts the provider almost in line with the top rate on the market (RCI Bank paying 1.65%).
National Counties Building Society has launched a new range of Fixed Rate Bonds, replacing the previous versions, which were all paying lower rates. The 1 Year Fixed Rate Bond pays 1.81% on balances of £1,000+ and 2.01% on balances of £10,000+ (previously 1.56%/1.76%). The 2 Year Fixed Rate Bond pays 2.06% on balances of £1,000+ and 2.26% on balances of £10,000+ (previously 1.81%/2.01%). The 3 Year Fixed Rate Bond pays 2.31% on balances of £1,000+ and 2.51% on balances of £10,000+ (previously 2.26%). The 5 Year Fixed Rate Bond pays 2.61% on balances of £1,000+ and 2.81% on balances of £10,000+ (previously 2.61%).
The new versions are more competitively priced than previously, with the 1, 2 and 3 year bonds entering the top five for the respective terms.
In addition, the provider launched a new 2 Year Tracker Bond paying 2.00%, that guarantees to be 1.50% above the Bank of England Base Rate for the 2 year term. This is currently the highest paying tracker bond on the market. It is worth noting that with the top rate of 2.40% for a 2 year fixed rate bond at the moment, the base rate would need to increase significantly to achieve a better return over the term.
Secure Trust Bank has launched a new version of its 5 Year Fixed Rate Bond paying 3.08% and its 7 Year Fixed Rate Bond paying 3.11%. The rates are the same as the previous versions, which were withdrawn the week before and both are market leading rates for the respective terms.
However, at the time of writing, there is still no sign of the market leading 2 year bond and notice accounts that were withdrawn at the same time.
Vanquis Bank has increased the rate on its 5 Year Fixed Rate Bond from 2.90% to 2.96% for new accounts opened. This new version has entered our best buy table in third place, just 0.01% higher than the next best bonds.
Charter Savings Bank has reduced the rates on selected fixed rate bonds. The 18 Month Fixed Rate Bond pays 2.10% (the previous version paid 2.15%). The 3 Year Fixed Rate Bond pays 2.55% (the previous version paid 2.65%). The 5 Year Fixed Rate Bond pays 2.95% (the previous version paid 3.05%).
At the same time, the provider launched an improved version of its 2 Year Fixed Rate Bond paying 2.28% (the previous version was paying 2.25%).
It’s a shame to see Charter Savings Bank reduce rates, although they still remain competitive, each term remaining in the best buy tables, with the 3 year bond sitting next in line after the market leader, despite the reduction and the 2 year bond entering the top five bonds for the term.
Virgin Money has launched a new 2 year fixed rate ISA paying 2.06% tax free/AER, replacing the previous version which paid 2.00%. Accounts can be opened with a minimum of £1 and savers can choose between an online version of the account or one which is opened and operated in branch or by post. Transfers in from previous cash ISAs are accepted and withdrawals can be made from the account, subject to a charge equivalent to 90 days loss of interest on the amount withdrawn.
Shawbrook Bank has launched a new version of its 1 year fixed rate ISA paying 1.85% tax free/AER, an improvement on the previous version, which paid 1.75%. Accounts can be opened online with a minimum of £5,000 and transfers in from previous cash ISAs are accepted. Withdrawals and transfers out can be made from the account, subject to the loss of 90 days interest on the amount withdrawn.
The 2 year ISA from Virgin is a welcome sight, as it has pulled clear from a whole group of providers, each paying the same rate (2.00%). Shawbrook Bank also moves up the one year table, overtaking Julian Hodge Bank (1.80%) at the summit. What is particularly pleasing about these changes is that both providers were already well placed in the best buy tables, with Virgin joint top and Shawbrook in joint second place.
Charter Savings Bank has launched a new market leading 180 Day Notice account paying 2.00% gross/AER. In addition, the provider has launched a new version of its 95 day notice account paying 1.85% gross/AER (the previous version paid 1.65%). Both accounts can be opened online with a minimum of £1,000.
Paragon Bank has re-launched its 120 Day Notice Account (Issue 4) paying 1.96% gross/AER. Accounts can be opened online with a minimum of £500, up to a maximum of £100,000 and interest can be paid on an annual or monthly basis.
The launch of this market leading notice account from Charter Savings Bank, led to the provider occupying the top three slots in our best buy table. Paragon Bank has now split the pack by re-launching this account, beating Charter Savings Bank’s equivalent account (1.95%) by the smallest of margins.
Paragon Bank has also launched new versions of its 2 year and 5 year fixed rate bonds that are both market leaders. The 2 Year Fixed Rate Account is paying 2.40% gross/AER (the previous version was paying 2.25%) and the 5 Year Fixed Rate Account is paying 3.10% gross/AER and is new to the market. Accounts can be opened online with a minimum of £1,000, up to a maximum of £100,000 and funds cannot be accessed within the term.
If you have questions regarding the above accounts or would like to speak to one of our savings advisers about the best accounts to suit you, call us on 0800 321 3581.